2019 (8) TMI 1355 - AAR - GST

Permission for withdrawal of Advance Ruling application - Classification of goods - fruit beverages or drinks - scope of FSSAI Act in section 2.3.3.A - Is there any persevered percentage of fruit or pulp in the beverages to call them as carbonated fruit beverages or drinks under the GST Act? - HELD THAT - The applicant is allowed to withdraw their application and ordered accordingly

Summary

Issues:
1. Determination of tax rate and HSN Code for fruit beverages.
2. Classification aid from the FSSAI Act for product categorization.
3. Criteria for carbonated fruit beverages under the GST Act.

Issue 1: Determination of tax rate and HSN Code for fruit beverages:
The applicant sought an Advance Ruling on the tax rate and HSN Code for fruit beverages. The applicant intended to manufacture fruit juice-based aerated drinks and inquired about the applicable tax rate. They referred to industry practices suggesting a 12% tax rate for fruit juice-based drinks falling under HSN Code 22029020. The FSSAI Act's definition of "Carbonated beverage with fruit juice" was considered relevant for classification. The applicant provided detailed information on the manufacturing process and ingredients, emphasizing the fruit content in the final product. They argued that products with over 10% fruit content should be taxed at 12% under HSN Code 2202. The applicant also cited a legal precedent involving a similar product classification issue and sought expert opinion for clarification.

Issue 2: Classification aid from the FSSAI Act for product categorization:
The applicant relied on the FSSAI Act's definitions of carbonated fruit beverages or fruit drinks to support their classification argument. They highlighted specific requirements regarding fruit content percentages and product characteristics outlined in the FSSAI Act. The applicant contended that their product, with a fruit content exceeding 10%, should align with the FSSAI Act's categorization, leading to a 12% tax rate under the GST Act. They referenced a judicial decision involving a comparable product to strengthen their position on classification based on FSSAI guidelines.

Issue 3: Criteria for carbonated fruit beverages under the GST Act:
During the hearing, the applicant presented additional details on the manufacturing process and ingredients of the carbonated fruit juice. They emphasized compliance with FSSAI regulations and sought clarity on the classification of their product under the GST Act. The applicant referenced a Supreme Court judgment related to a similar product classification issue and highlighted the relevance of Food Safety Authorities' opinions in such matters. Ultimately, the applicant decided to withdraw their application for Advance Ruling due to personal reasons, leading to the dismissal of the application.

This comprehensive analysis of the judgment addresses the issues raised by the applicant regarding the tax rate, HSN Code, classification aid from the FSSAI Act, and criteria for carbonated fruit beverages under the GST Act. The applicant's arguments, legal references, and decision to withdraw the application are thoroughly examined, providing a detailed overview of the Advance Ruling Authority's considerations and ruling.